A firm sold some of its fixed assets for cash. As a result, the:
A) current ratio increased, while the quick ratio remained unchanged.
B)current ratio increased, while the quick ratio decreased.
C) quick ratio increased, and the current ratio remained unchanged.
D)quick ratio increased, and the current ratio decreased.
E)quick ratio and the current ratio both increased.
A firm has sales of $750, total assets of $400, and a debt-equity ratio of 1.50. If the return on equity is 10 percent, what is the firm's net income?
A) $16
B) $20
C) $32
D) $40
E) $75
Ernst Industries has 300,000 shares of common stock outstanding, sales of $12 million, net income of $1.1 million, and depreciation of $2 million. What are the earnings per share for Ernst Industries?
A) $3.67
B) $4.00
C) $10.33
D) $40.00
E) $43.67
A firm has a ROA of 8 percent, sales of $100, and total assets of $75. What is the profit margin?
A) 1.3 percent
B) 4.3 percent
C) 6.0 percent
D) 10.7 percent
E) 16.7 percent
CatchaTan Co. had net sales of $750,000 over the past year. During that time, average receivables were $150,000. Assuming a 365-day year, what was the average collection period?
A) 4 days
B)5 days
C) 36 days
D) 48 days
E) 73 days
A times interest earned ratio of 2.7 means that:
A) a firm generates enough cash to cover its interest expense 2.7 times.
B) a firm has sufficient EBIT to cover its interest expense 2.7 times.
C) the interest expense of a firm exceeds the taxable income by 2.7 times.
D) the net income of a firm is sufficient to cover its interest expense 2.7 times.
E) the firm earned $1.00 in EBIT for every $2.70 it paid out in interest.
Hedging refers to
A) avoiding high-risk investment opportunities.
B) a transaction that reduces risk exposure.
C) the same thing as asset diversification.
D) avoiding the financial futures market.
General Rent-All's officers arrange a $50,000 loan. The company is required to maintain a minimum checking account balance of 10% of the outstanding loan. This practice is called
A) an installment loan.
B) a compensating balance.
C) a discounted loan.
D) a balloon payment.
The difference between the amount of cash on the firm's books and the amount credited to it by the bank is
A) an overdraft.
B) interest revenue.
C) extended disbursement.
D) float.
Ernst Industries has 300,000 shares of common stock outstanding, sales of $12 million, net income of $1.1 million, and depreciation of $2 million.
What are the earnings per share for Ernst Industries?
A)$3.67
B) $4.00
C)$10.33
D) $40.00
E) $43.67
The purpose of secondary trading is to
A) provide liquidity and competition between investments.
B) provide a market for securities not handled in primary trading.
C) provide jobs for brokers and dealers.
D) provide lower commissions than on the organized exchanges.
The Securities Act of 1933 is primarily concerned with
A) original issues of securities.
B) secondary trading of securities.
C) national securities market.
D) protecting customers of bankrupt securities firms.
The Securities Exchange Act of 1934 is primarily concerned with
A) a central market system.
B) regulation of organized exchanges.
C) protecting customers of bankrupt securities firms.
D) original issues of securities.
The Securities Act of 1933 did not
A) require that all securities sold in more than one state be registered with the SEC.
B) hold corporate officers liable for losses for those who were misled by false information in the prospectus.
C) set guidelines for insiders who trade in the securities of their own firm.
D) require a prospectus for all new issues of securities which contains all information appearing in the registration statement.